Home Loan Limits Increase for 2017

After ten years, the Federal Home Finance Agency (FHFA) will increase its conforming home loan limits for 2017, increasing home buyers financing power. The conforming limit has not budged since it was raised to $417,000 in 2006, just prior to the financial crisis.

Conforming home loan limits, which apply to all conventional mortgages delivered to Fannie Mae and Freddie Mac, are set each year by FHFA. Fannie Mae and Freddie Mac are restricted to purchasing mortgages with loan balances at or below the conforming limit set each year.

According to the 3rd quarter House Price Index report, home prices are now, finally, above the 3rd quarter home prices of 2007. After 10 years, home prices have returned to their pre-decline level prompting FHFA to increase the baseline conforming limits.

Conventional and VA Home Loans

The conforming loan limits apply to both conventional financing as well as Veteran home loans (VA Loans).

The 2017 conforming loan limits will increase to $424,100 on January 1, 2017 for single family residences. Two to four family unit limits are also increasing.

Loans that exceed the established conforming loan amount are commonly referred to as Jumbo loans. Jumbo loans are typically not backed by Fannie Mae or Freddie Mac, and the eligibility requirements and guidelines are stricter.

High-Cost Areas

In 2009, loan limits were raised in certain areas where the median home price exceeded the national area. These are referred to as high-cost areas. There are 234 high-cost areas nationwide which include New York City, Los Angeles, San Francisco, Alaska and Hawaii.

Since the baseline conforming limits will be higher in 2017, the high-cost loan limts are increasing as well to $636,150, which is 150% of $424,100 for one-unit properties.

What does this mean for you? You can finance a higher priced home without falling into the Jumbo category which carries tougher guidelines.

Get YOU Magazine!

Don't miss another issue! Get YOU Magazine today, a monthly online magazine focused on the issues that matter most to You!

Enter your email below Now!

Find us on Facebook

Categories

Categories

ElizabethRoseBlogs.com is a site that provides information about housing, mortgages, and breaking economic news. The information contained on ElizabethRoseBogs site is for informational purposes only and is not an advertisement for products or services. The views and opinions expressed herein are those of the author. We are not affiliated with the US Government, US Armed Forces or Department of Veteran Affairs. This site is not connected with any government agency. This is not an advertisement to extend consumer credit as defined in Regulation Z.226.2. Consumers are encouraged to consult tax advisors, real estate attorneys, or other relevant professionals regarding their personal circumstances and state regulations.